Correlation Between Europacific Growth and Cibc Atlas

Can any of the company-specific risk be diversified away by investing in both Europacific Growth and Cibc Atlas at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Europacific Growth and Cibc Atlas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Europacific Growth Fund and Cibc Atlas International, you can compare the effects of market volatilities on Europacific Growth and Cibc Atlas and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Europacific Growth with a short position of Cibc Atlas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Cibc Atlas.

Diversification Opportunities for Europacific Growth and Cibc Atlas

0.9

Correlation Coefficient

Europacific Growth  Cibc Atlas

Almost no diversification

The 3 months correlation between Europacific and Cibc is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Cibc Atlas International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibc Atlas International and Europacific Growth is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Europacific Growth Fund are associated (or correlated) with Cibc Atlas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibc Atlas International has no effect on the direction of Europacific Growth i.e., Europacific Growth and Cibc Atlas go up and down completely randomly.

Pair Corralation between Europacific Growth and Cibc Atlas

Assuming the 90 days horizon Europacific Growth is expected to generate 1.2 times less return on investment than Cibc Atlas. In addition to that, Europacific Growth is 1.12 times more volatile than Cibc Atlas International. It trades about 0.26 of its total potential returns per unit of risk. Cibc Atlas International is currently generating about 0.35 per unit of volatility. If you would invest  1,295  in Cibc Atlas International on September 14, 2024 and sell it today you would earn a total of  45.00  from holding Cibc Atlas International or generate 3.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Europacific Growth Fund  vs.  Cibc Atlas International

Europacific Growth

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Europacific Growth Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Europacific Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cibc Atlas International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cibc Atlas International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Cibc Atlas is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Europacific Growth and Cibc Atlas

The main advantage of trading using opposite Europacific Growth and Cibc Atlas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth position performs unexpectedly, Cibc Atlas can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cibc Atlas will offset losses from the drop in Cibc Atlas' long position.

The idea behind Europacific Growth Fund and Cibc Atlas International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.